A Study on the Specific Factors that Affect Motorcycle Buying Behavior of people in Kathmandu

Jwala Bhatt Kathmandu University School of Management, Nepal E-mail: [email protected] Murary Prasad Roy Kathmandu University School of Management, Nepal E-mail: [email protected] Shivshankar Yadav Kathmandu University School of Management, Nepal E-mail: [email protected] Shraddha Sangroula Kathmandu University School of Management, Nepal E-mail: [email protected] Suraj Bansal Kathmandu University School of Management, Nepal E-mail: [email protected] Suyesh Bhattarai Kathmandu University School of Management, Nepal E-mail: [email protected]

7th August 2012

ABSTRACT
This is a report on survey conducted by Shark Enterprises and the purpose of this survey was to find the motorcycle buying behavior of the Nepalese people which would give us an idea of the most preferred type of motorcycle in Nepal. The data were collected from around hundred people with structured questionnaire though the internet. Microsoft Excel was used to analyze the response of the survey. It is presumed that Bajaj bikes are found everywhere but our findings indicate that Honda bikes are most preferred bike in Nepal. It is also true that working professionals need bike to go to office but our survey indicate that students are the major buyers of the bike and on the other hand mileage is the most important factor considered by them while making the buying decision. This survey serves as a valuable guideline for the Shark Enterprises to find out which bike should be imported in Nepal for sale.

INTRODUCTION
The Shark Enterprises established in 2011 conducted this survey by presenting different types of questions to gather the information for the marketing research .The report presents the major findings of the online survey which was done to find out the most preferred type of bike in Nepal. The purpose of this survey was to collect the data and the public feedback which would help the Shark Enterprises to know about the motorcycle market in Nepal. The Shark Enterprises celebrated its first anniversary on 20th July 2012.This company continues to grow and expand its business in the country. The present survey is the prime example of its expansion project. The company is now attempting to work as a motorcycle distributor in Kathmandu as well. For this, it is planning to import the motorbike that meets the expectation of the customers of motorcycle in Kathmandu valley. For this, a survey via Facebook was conducted to identify the basic factors that impact the buying behavior of the consumer. The factors considered were type, mileage, power, cost, after sale service etc. The survey was posted online on 3rd August 2012 for two days but because of overwhelming success and continuous response, the survey was extended for extra two days. About hundred people participated in the survey. The survey was designed to ask a broad array of questions in

order to gather the information from the consumers and prospective consumers. The information gathered from the survey was thoroughly analyzed and are graphically represented with this report with descriptive analysis. The basic questions we want to investigate through our research are: 1. What are the basic factors that determine the motorbike buying behavior of consumers? 2. What is the level of association of buying decision of the consumer with the various considered independent factors like type, cost, mileage, power and after sale service? 3. How does age group, occupation, price range affect the motorcycle buying decisions? 4. What type of motorcycle could be the best one to import that could make most profitable sales in Kathmandu valley?

RATIONALE OF THE STUDY

Motorcycle is preferred as the most convenient means of transport because of narrow roads and regular traffic jams in the city. Unlike cars and other big public vehicles, motorcycle gets through traffics much faster. This study was made to identify the factors that actually determine the motorcycle buying behavior of the people in Kathmandu. Keeping this in mind, this research questionnaire was designed and we tried to identify what factors induce people to buy any particular type of motorcycle. One of the main issues in the rationale for this study was the opportunity to study the motorcycle market in Kathmandu. Kathmandu is one of the cities facing huge traffic problem, yet the demand and sales of motorcycle has not decreased here. Hence, it can be a good market to start up a motorbike distribution centre. This research finding can also be used for further references if any other studies related to consumer preference of motorbike are conducted in future.

PURPOSE OF THE STUDY

Purpose of this study is to determine the factors that are basically considered by most of the people in Kathmandu while buying motorcycles. The basic factors that has been considered are looks, power, mileage, cost and after sale services which are the independent factor for this study on which the motorbike buying behavior of the customers of Kathmandu are dependent upon. The study is basically conducted: To identify the potential market of motorbikes. To determine the factors those are basically considered by people while buying motorbike. To determine the dependency of motorbike buyers upon various independent factors (i.e. types, power, mileage, cost and after sale services). To identify the most popular type of bike amongst the people in the valley. To determine what type of motorbike will sell most in the Kathmandu valley.

LITERATURE REVIEW
Not much academic research has been conducted regarding the preference of customers while buying a bike. Bicycle seems to be a popular topic of research among students because it is most frequently used by students, motorcycles on the other hand does not receive a lot of interests from the academic circle. In western countries, particularly United States, motorcycles are often seen as a sign of non-conformity and rebelliousness. Hence, students try their best to avoid motorcycles or motorcyclists. In Asian countries however, motorcycles are the most preferred modes of transport therefore, there are some research conducted regarding the preference of customers while buying a motorcycle. A study very similar to ours was conducted by A. Sukumar in 2008. He studied the various reasons why people of the city of Coimbatore prefer TVS motorcycles above any other. After surveying 130 existing customers, he was able to conclude that they prefer TVS because of low maintenance cost, good model and good long riding (A. Sukumar, 2008). Another study conducted in China concluded that motorcycles are used more by males than by females (Wang

et al, 2011). While our study does not really focus on the genders of the motorcycles riders, the results of Wangs study gave meaningful insights to our study. Another extremely interesting study was conducted by Osman et al of the University of Malaysia in 2007. Osman and associates were interested in finding out whether or not the place of manufacture for motorcycles affects consumer choice. The results showed that the preference of customers while buying motorcycles is deeply affected by what country the motorcycle was manufactured in. The results also showed that the attitudes of the customer base regarding ethnicity had direct implications on the purchase of motorcycles because their taste differed according to which country or which group of people manufactured their motorcycles (Osman et al, 2007). An article by Francis Robert quotes Don Brown, president of DJB associates, a motorcycle research group, as saying "For a lot of people, it's not that they want a motorcycle; it's that they want a Harley, This study reveals that many times, what the people are looking for is the brand and not the features. But this type of consumer behavior is typical only in America and European countries where cost is not a factor and everything is about the brand (Francis Robert, 2000). Yet another study conducted by Samir Bhat in 2007 showed that the prime consideration of purchasers of new bikes is fuel efficiency, friends and relatives have the biggest influence in buying decisions (Bhat, 2007). In all the previous studies that have been conducted about motorcycles and the preference of the customers, the researchers have focused only one specific detail. Sukumar studied the reasons for the success of only one brand of motorcycle; TVS. Osman studied whether or not place of manufacture is important factor for purchasers of motorcycle. Robert studies the reasons why people purchase the Harley Davidson and Samir focused most of his research on 150 CC motorcycles. Our research is different from the ones discussed above in the sense that our research does not confine the scope of the study to one particular area or field. Our research focuses on the preference of the customers to motorcycles as a whole. We have not narrowed down the scope to brand, power, looks or mileage. The respondents in our study are free to choose from an array of options for each of these particulars therefore when we analyze the result, we will among other things be able to: 1) Formulate an ideal bike with the characteristics most desired by the customers. 2) Analyze and predict whether or not a particular model will be successful in the market.

METHODOLOGY
Our research is an attempt to identify the feasible market to start up a motorcycle distribution business in Kathmandu. However, research was conducted with a small survey questionnaire that was forwarded through facebook to various people as facebook is the most visited social networking site by the people. Our research was a primary study attempted to identify the potential market but few literatures related to it was also referred. Research Method Our research was based on the quantitative aspect of the study. The quantitative study was conducted through the survey questionnaires purely containing close ended questions. The concept of open ended question was not considered because we wanted to be specific to our need of survey. Survey Questionnaires: We had total 11 questions for the survey which were entirely close ended including the age and occupation identification of customers. The questionnaires were forwarded to about 500 people and we received response from about 100 people within 4 days. The consumers, who have a motorbike or are interested in having a motor bike in the area of Kathmandu, were taken as the population for this study. Samples: We received about 100 responses from our survey. A sample of 71 consumers was selected for the current study because the 29 unselected had missing responses. The respondents of this study were forwarded the Questionnaire through their Facebook id and were not put into any kind of pressure in terms of filling the survey questionnaires; it was all their voluntary response to survey due to which we believe the survey results are fair and accurate in terms of response of the sample population.

Measurements Type of bike: The respondents were given 4 basic types of motorbikes to mark one of their preferences. The options were: sports, cruiser, dirt and standard. The fifth option was others. The respondents were asked to fill their choice of motorbike type. Power: The power ranges were listed which the respondents marked according to their choice: (100135cc, 150- 180cc, 200-250cc and above 250cc motorbikes). The ranges are listed which are mostly preferred by people and is popular among the customers of Kathmandu. Mileage: We assumed mileage as one of the important considerations for purchasing a bike. So we put it in the form of importance scale question in our survey questionnaire with three basic options: (extremely important, somewhat important and not at all important), in which customers ticked the option which matched their feeling. Cost: Purchasing power effects the buying decision of customers despite their preferences of particular type of bike. So we have asked the respondents if cost to them while purchasing a motorbike was the most critical factor with options: (Agree, Neither Agree nor Disagree and Disagree). The customer were also given the preferable price range for a motorbike in Nepalese Rupees (NRs) (100,000-125,000, 125,001150,000, 150,001175,000, 175,001200,000 & above 200,000). Brand: We also attempted to identify the most popular motorbike brand among the customers of the Kathmandu valley for which we asked the respondent to choose the brand of their choice which was Bajaj, Hero, Yamaha, Honda and others (respondents were asked to list the one of their preference).

Factor consideration: The important factor for purchasing motorbike was to be identified. So for this we used likert scale in which the respondents rated the most important to the least important factor they consider while purchasing a motorcycle. The scale range from 1 to 5, in which 1 was for the highest considered factor and 5 for the lowest one. One rate could be assigned to only one factor. The factor listed were (power, mileage, looks, after sale service and maintenance cost).

RESULTS AND DISCUSSION

Age Group
16-20 31-35 21-25 36 above 7% 3% 21% 14% 26-30

55%

As most respondents were students, the age group is mostly between 21-25 years.

Occupation
student businessman 6% 4% 14% 76% service employee other

As our survey was done within our Facebook network we had 76% student respondents. This might have distorted our findings a bit due to which our decisions cannot fully rely on the research findings. Reason behind bike purchase
dont own a bike Own a bike

Purpose of purchase
going to school/college going to work

15%

for recreation/travel passion others 5% 5% 2%

85%

28%

60%

15% of our respondents did not own a motorbike. Out of those who own a motorbike 88% responded that they bought the motorbike for daily activities such as going to school/college or going to work.

Preferred type of motorcycle

sports cruiser 7% 25% dirt standard other

44%

18%

6%

Most respondents prefer standard bikes.

Rank of the various factors

Maintenance Cost 21% 16% 19% 24% 20% Power After Sales Service Looks Mileage

Careful analysis of the data collected shows that the respondents value mileage as the most preferable factor. The ranking is followed by power, looks, after sales service and maintenance cost.

Ideal price range

100,000 - 125,000 125,001 - 150,000 150,001 - 175,000 175,001 - 200,000 above 200,000 9 20 13 12 17

The result shows that the consumers are inclined to purchasing motorbikes in the range of 125,001- 150,000 and above 200,000 although the distribution is fairly even.

Power preference
100-135cc 150-180 13% 25% 200-250 250 above

16%

46%

Most consumers prefer 150-180cc motorbikes.

Cost above all factors

40 30 20 10 0 Agree Disagree Neither Agree nor disagree

29 18

24

Agree Disagree Neither Agree nor disagree

The findings show that most consumers consider cost over all other factors. But the results are more or less similar for other factors as well. Popular Brand of Motorcycle

16% 1% 1% 1%

16% Bajaj Hero 14% Honda i dont know Royal Enfield suzuki Yamaha

51%

51% of the respondents considered Honda as the best brand in the market followed by Bajaj and Yamaha.

Biggest Motivator

1% 4% 4% 7%

2%

3% 2% 1%

Advertisement choice to ride Family / relative's suggestion Girlfriend Happiness

76% Necessity

The result shows that necessity is the major motivator for purchasing a motorcycle.

By considering above results we have come with the following findings and conclusion: From the survey we obtained information about the target market due to which we can design our marketing strategies accordingly and introduce various schemes that induces students between the age group of 21-25 years to purchase the motorcycle.

Main reason people purchase bike is to go to school/college and work. These people are generally students and jobholders and have low budget. We have also found that the biggest motivator for the purchase of motorbikes is necessity. So we must introduce bike models that are affordably priced, have good mileage and low maintenance costs. We must also try to provide them loan facilities at our showroom so that we can increase the sales of our motorbikes as these groups of people cannot afford to pay fully at once.

We found that most preferred type of motorcycle is standard bikes. This is also supported by mileage preference over other factors by most of the respondents. Therefore we must focus towards importing standard bike models in our showroom.

26 % of the respondents prefer Sports bike. This is also significant to us as it is a second best potential market for us. Most of the students have responded that they prefer sports bike. Students in our country are generally dependent on their parents so their purchasing power is equivalent to that of their parents. We can start importing few models of sports bike at the beginning and then decide on future course of action.

While considering various factors such as mileage, power, looks, after sales and maintenance costs we found that mileage was the most important factor considered by the respondents while considering motorbike purchase decisions. However, we cannot neglect other factors because the variation in respondents preferences among these factors is very low.

Ideal price range of respondents for the motorbikes is between Nrs.125000-150000/-. So we must introduce models that are priced between these ranges. But there are 24% of the respondents who also prefers to buy motorbikes that are priced above Nrs.200000/-. Sports bike generally falls in this range. We can introduce few models of sports bike for such customers in the beginning phase.

Most respondents prefer 150-180cc power bikes. These bikes have good mileage as well as low maintenance costs. The motorbikes of 150cc fall in the price range of Nrs.125000150000/- which supports our middle range customers who will want to buy standard motorbikes with good mileage.

40% of our respondents said they put cost above all other factors whereas 25% of the respondents said they do not put cost above all other factors. So, we can come to a conclusion that most of the consumers are cost sensitive when it comes to buying a motorbike.

Japanese motorbikes are most preferred in Nepalese market among which Honda has the highest share of 51%. Hence we should look to import more of Honda motorbikes.

LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH

There were few limitations of this survey which are as follows: Limited number of sample size, near about one hundred. Samples were approached through facebook only so we cannot accurately obtain the desired findings. Most of the respondents were students so we cannot fully rely only on the findings. The survey questionnaire was made available only for four days, so, there were time constraints for study. There are more researches required to be conducted regarding motorbike buying behavior in Kathmandu valley. If further studies can be conducted about the preference of the motorbike as the means of the transportation in Kathmandu, more relevant and reliable result can be obtained. This particular report can be a ground for study on similar topic regarding buying behavior of the customers based on several factors. Further research may explore the causal relationship between customers perceived value of motorbike and market for various types of motorbike. Moreover future research may help to identify other possible factors like colors, income group, gender, geographical locations and many more.

REFERENCES

Bhat, S. (2005-2007). Customer Preference and customer satisfaction with regard to specific brands of bikes (TVS, Honda, Bajaj) under 150cc category between age group of 18-25 college going students on the basis of price, fuel efficiency, brand name, stay and comfort. Kurukshetra University. Francis, R. (2000). Leaders of the pack. Brandweek, 10644318, Vol 41, Issue 26 . Sukumar, A. (2008). A study on consumer preference of TVS motorcycle with special reference to Murugesan Motores, Periyakulam, Talik. Ye, L., & Wang, Q. (2011). Case study of motorcycle use and policy analysis in Huizhou China. J Trasnp. , 831-836. Yeong, N. C., Mohamad, O., Ramayah, T., & Omar, A. (January 2007). Purchase preference of selected Malaysian Motorcycyle buyers: the discriminating role of perception of country of origin of brand and ethnocentrism. Asian Academy of Management Journal, Vol. 12, No.1 , 1-22.

APPENDIX
Questionnaire 1. What is your age group? 16-20 21-25 26-30 31-35 36 and above 2. What is your occupation? Student Businessman Service Employee Others 3. What was the main reason behind your bike purchase? Going to School/ College Going to work For recreation/ travel Passion Others Dont own a bike

4. What type of motorcycle do you prefer? Sports bike Cruiser bike Dirt bike Standard bike Other:

5. Rank the following factor as per your preference1 being the highest rank and 5 being the lowest rank (Do not give same rank to two options) 1 Power Mileage Looks Availability of after sales service Maintenance cost 6. What is the ideal price range for a new motorcycle? 100,000 - 125,000 125,001 - 150,000 150,001 - 175,000 175,001 - 200,000 Above 200,000 7. How much power do you prefer in your motorbike? 100-135cc 150-180cc 200-250cc Above 250cc 8. I consider cost above all factors ... Agree Disagree Neither Agree nor disagree 2 3 4 5

9. Mileage to me is ... Extremely important Somewhat important Not at all important

10. Which brand motorcycle do you consider the best in Nepalese market? Bajaj Hero Yamaha Honda Other: 11. What is the biggest motivator while purchasing a motorcycle? Necessity Advertisement Peer pressure Family / relative's suggestion Other: